Tuesday, December 11, 2012

See what billionnaire mutual fund manager Ron Baron's thoughts are on these issues and find out why he's so optimistic about the future of the market. Click the link below to read U.S. News & World Report's "Why Ron Baron is Sweet on Stocks":

Wednesday, December 5, 2012

Chris joined Family
Investment Center in November of 2012 as an investment advisor after passing
the FINRA Series 7 and FINRA Series 66 Uniform Combined State Law
Examinations. He has always taken great interest in the financial markets and
feels passionate about helping others achieve their financial goals.

He received a Bachelor of
Science degree in Wildlife Ecology and Conservation from Northwest Missouri
State University in May of 1997 and began his career in the environmental
public health and environmental consulting professions. Chris has operated his
own environmental testing company, Advanced Aquatics, since 2004. His
background as an independent businessman brings added experience to our
clients.

Chris was raised on the
family farm near Ravenwood, MO. He is married to Shelly and they have two
children, Ryesen and Ryver. They attend St. Gregory’s Church in Maryville, MO.

Nakita Peterson, Administrative Assistant

Nakita joined Family
Investment Center as Administrative Assistant in September of 2012. She
received her Bachelor of Science degree in Applied Advertising with a minor in
Art from Northwest Missouri State University in July of 2009. From December of
2009 until August of 2012 she was the Art Director at Midland Marketing Group
in St. Joseph, MO.

During her education at
NWMSU, she worked at the university’s newspaper, The Northwest Missourian, as
an advertising designer and design manager. In 2007, she received Advertising
Designer of the Year.

Nakita spends the majority
of her time with her two year old son, Sloan. She enjoys doing freelance
graphic design in her spare time. She attends church at Frederick Boulevard
Baptist Church.

Monday, November 26, 2012

Everybody loves Goober. He’s the simple but lovable mechanic on the old Andy Griffith TV shows. I love Goober, too, but I think he represents a bygone world. Cars used to be simple, and it didn’t take a rocket scientist to fix them. A lovable guy like Goober was a perfect fit for that simple world.

Personal finance used to be like that, too. There were a few simple options, and people finally retired when they couldn’t work anymore. So they talked with their friendly banker or insurance salesman, and things worked out fine. Times were simpler, and solutions were, too.

But cars are more complex today and so are finances. People live decades after retirement, and there are hundreds – maybe thousands - of investment choices. The hometown bank is a giant corporation, and insurance companies offer a dizzying array of complicated policies. Simple approaches aren’t sufficient in today’s complicated world.

Personal finance still isn’t rocket science, but it is science. Our expert team can help sort through the issues, with minimal cost and fuss. We’re lovable, too, but we really understand personal finance and investing in this complex world!

Wednesday, November 14, 2012

Published by GTRUST CO. (GTrust Financial Advisors), with permission from Bob Veres

November 8, 2012

One of the most
interesting aspects of every presidential election is the inevitable
postelection trauma suffered by the roughly 50% of Americans who supported the
unsuccessful candidate. Those of us with long memories will recall Americans
vowing they would leave the country after George W. Bush won the disputed 2000
election, and again four years later. Judging by President Bush's extremely low
profile during the 2012 presidential election campaign, his eight years in
office were not considered an unqualified success even by his own party. Yet
the country has survived, and one can predict with confidence that it will weather
any political issues (and policies) that arise during a second Obama
presidency.

In fact, if the citizens
whose candidates won can come down from their highs, and those whose candidates
lost can shake off the depression, they would notice that the country's
economic system has been remarkably resilient despite the dysfunctional political
process that virtually everybody, on both sides of the spectrum, rightly
deplore. Despite the selloff the day after the recent election, the American
stock market has actually delivered better performance under Democratic than
Republican presidents--for no visible economic reason. (The accompanying chart
shows the evidence pre-Obama.)

The biggest economic
problems that America faces today have actually accrued slowly, gradually, and
under the stewardship of multiple presidents from both parties. There is some evidence
that the U.S. electorate doesn't yet understand the high cost of avoidance, of political
one-liners offered by candidates from both parties that have trivialized very
real long term problems or suggested that they can be solved quickly if the
right person is elected.

Fortunately, it is
possible to understand the nature of these bigger-picture, bigger-than-asound- bite
problems--and the solutions. You just have to put up with a lot of charts.

The charts can be
found here: http://www.businessinsider.com/politicseconomics-facts-charts-2012-6#courtesy of Business Insider. What you see first is a long, relatively
smooth avenue of growth in the U.S. economy since 1947, punctuated by a significant
drop in 2008 and a recovery to the former highs since then. A second chart
shows real per capita income--the amount of money, inflation-adjusted, that the
average worker takes home, and here we see a bigger drop for a longer period of
time. Perhaps the most remarkable chart shows essentially the same thing for
corporations: you see a very steep drop in corporate profits after tax from
2008 through 2010. But then, unlike the worker income, corporate profits zoom
back up again, surpassing record highs. What is most remarkable is that most of
the rise in corporate profits--literally much more than half--has been recorded
in the last 11 years. Before that, corporate profit growth was slow and steady.
In the past decade, it has been very uneven and spectacularly fast.

The next chart shows
that companies are making more profit per dollar of sales than ever before. The
next set of graphs is about jobs, and you see a big drop in civilian employment
as a percentage of the total population during the recession, which bottomed
out in 2010 and continues to scrape along at roughly 58%--well below the late
1990s high of 64%. But if you look at the chart as a whole, those high employment
rates were a historical anomaly. The current total employment-population ratio
is actually higher than it was at any time from 1940 to 1976, and is well above
levels in the early 1980s. In the following chart, we see that wages as a
percent of the economy have reached an all-time low (roughly 44%). Companies are
sharing less of their revenue with employees than ever before.

What about debt and
spending levels? You already know that total debt in our economy is at an
all-time high, although individual debt has leveled off since 2008. In
subsequent charts, this is broken down into household debt, corporate debt, state
and local debt, and federal government debt. All of them have risen dramatically
over the past 30 years; the lines practically jump off the page. So, of course,
you look for where to cut. A chart looks first at the number of state and local
workers, and finds that they now represent about the same percentage of total
U.S. employees as there have been for the last 40 years. The next chart, the
39th in the series, shows that, despite what you may have heard about a
ballooning Washington bureaucracy, the total number of federal government
employees has held steady for nearly 50 years, and is actually below levels in
the late 1960s. Looked at another way, federal government workers now make up a
smaller percentage of the total workforce than at any time since the 1940s.

The federal debt
problem is not complicated: charts show that spending has gone up as federal
tax revenue (due to the recession and slow recovery) has fallen dramatically.
The most interesting subsequent chart shows that by far the biggest contributor
to the increase-- really, the reason there has been any increase at all--has been
an explosion in the cost of Social Security, Medicare and Medicaid. You look at
the line rising from 1960 through 2011 and it looks a bit like the slope of the
Matterhorn: straight up. These programs now make up a record 16% of all
American economic activity--up from roughly 4.5% in 1960. And, of course, every
year sets a new record.

The inescapable
conclusion of this economic graphic slideshow is that corporations have done
very well during the four-year term of a president who business leaders have
accused of being a socialist. Individual workers have suffered under what many
have called a "populist" president. Overall debt has leveled off, but
somehow, the U.S. is going to have to gradually fix the out-of-balance social
programs, by reducing benefits and collecting more revenue to pay for them.

The slide show
commentary suggests that it took us 30 years to get into this mess; it may well
take us 30 more to climb back out of it. Let's see; that covers the span of
between four and seven future presidents, and the White House will almost
certainly change hands (or parties) several times over that time period. We will
need all of them, plus Congress, to recognize what you now know. And we will need
all citizens, even those who were disappointed by the recent election, to
continue to push for meaningful solutions rather than take their money and vote
to Canada.

Tuesday, November 6, 2012

How much are you paying on your 401(k)? A poll conducted by AARP concluded that 71% believed that they paid no fees for their 401(k). In reality, all 401(k) plans have some fee structure set up. Because the amount of fees paid will impact your nest egg over time, every individual investor should be aware of the fees he or she is paying. An article recently published by MSN Money called "Is your 401k ripping you off?" further explains the affects of fees in employer plans.

It is important to understand the many different levels and types of fees as well. There may be portfolio management fees, transaction fees, commissions, mutual fund expenses, loads, or other types of expenses "built into" accounts. Regardless of the account type, MAKE SURE you know what fees you are paying and seek to reduce those costs.

Wednesday, October 31, 2012

With just a few days to go
before the presidential election on November 6th, it seems relevant
and timely to critically examine economic and financial policy issues.My goal is not to sway your vote one way or
the other, but rather to dispassionately consider policy challenges that will
confront the winner of the presidential race.

From my perspective,
generating high and sustained economic growth is the most paramount issue
facing the country.Presidents, like
quarterbacks, probably get too much credit when things are going well and too
much blame when times are tough.No
president in a free-market democracy can mandate or command the economy to
grow.Effective fiscal and monetary
policies are more nuanced.

Modern economic theory
supports the notion that government can and should act to attempt to stimulate
aggregate demand in times of recession or weak economic growth.The looming “fiscal cliff” or budget
sequestration is very disconcerting to many.Tax increases and/or federal spending austerity are not the correct
short-run policies for a feeble economy with high unemployment.Without question, this issue will be job #1
for the winner of the election.

The level of the federal
deficit and national debt must be addressed during the course of the next four
years.Research economists who examined
debt and gross domestic product (GDP) data from many countries have concluded
that a debt-to-GDP ratio exceeding 80% can stifle future economic growth,
increase unemployment and cripple the federal budget as a result of the high
cost of interest to service the debt.Our current debt-to-GDP ratio in the United States is 105%.

Strong economic growth would
help alleviate some of the pressure on the federal budget.The oft-used cliché that “a rising tide lifts
all boats” is applicable here.Economic
growth lowers the debt-to-GDP ratio, decreases unemployment and helps make
servicing the national debt more manageable.

Economic growth, as measured
by real growth in GDP, has exceeded the long-term average of 3% only two
quarters out of the past 12.This
weakness, along with political and policy uncertainty, has caused business
investment to stall and the banking system to be uncharacteristically risk
averse, particularly harming the job creation machine of small business that
has suffered under tight credit conditions.

Whoever wins the presidency
will face important policy-making decisions to address our sub-par
economy.Legislating incentives, such as
tax reformation, will generate better economic growth, increase employment and
reduce uncertainty.Exercise your right
to vote!

Tuesday, October 23, 2012

Are we better off now than we were four years ago?An article in Sunday’s issue of the St.Joseph News-Press addresses the question and asked local economists their
thoughts on important economic issues of the current election.Click here to read the article, "A decision for voters: Are you better off?"

Monday, October 22, 2012

The best way to avoid college debt? Plan in advance. There are several different ways to save for college, some of which include 529 plans, Uniform Transfer to Minor (UTMA) accounts, education savings accounts, and others. Check into all of your options, and also see which plans offer tax advantages. Talking to a professional could be extremely beneficial to make sure you receive all the benefits available.

Friday, October 5, 2012

In response to a few recent inquiries about investing in gold, we are sharing some of Warren Buffett's thoughts on gold in this interesting article that was posted October 3rd on Minyanville.com:

"Warren Buffett, the Oracle of Omaha and Chief Executive Officer ofBerkshire Hathaway (NYSE:BRK.A), is one of the most famous investors of all time. This billionaire has made so much money that he hardly knows what to do with it, although he has decided that after his passing he would like a sizable portion of his earnings to be dedicated to charity. Still, for all of the successes and endeavors that Buffett has taken on in his lifetime, there is one asset that he never quite warmed up to: gold.

Buffett is well-known for not only his strengths as a businessman, but also for his rather outspoken hatred of gold. The stance is somewhat controversial given the massive popularity of the precious metal that has made millions for investors all around. Also, we have seen other billionaire investors betting big on gold in recent weeks. Nevertheless, Buffett is not the least bit timid about his opposition towards the commodity. We scoured the Internet to bring you the seven best Warren Buffett quotes regarding gold and why he hates it so much.

1. “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

2. “The problem with commodities is that you are betting on what someone else would pay for them in six months. The commodity itself isn’t going to do anything for you….it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something that you expect to produce income for you over time.”

3. “Gold is a way of going long on fear, and it has been a pretty good way of going long on fear from time to time. But you really have to hope people become more afraid in a year or two years than they are now. And if they become more afraid you make money, if they become less afraid you lose money, but the gold itself doesn’t produce anything."

4. “I will say this about gold. If you took all the gold in the world, it would roughly make a cube 67 feet on a side…Now for that same cube of gold, it would be worth at today’s market prices about $7 trillion – that’s probably about a third of the value of all the stocks in the United States…For $7 trillion…you could have all the farmland in the United States, you could have about seven Exxon Mobils(NYSE:XOM) and you could have a trillion dollars of walking-around money…And if you offered me the choice of looking at some 67 foot cube of gold and looking at it all day, and you know me touching it and fondling it occasionally…Call me crazy, but I’ll take the farmland and the Exxon Mobils.”

5. “The major asset in this category is gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.”

6. “What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As 'bandwagon' investors join any party, they create their own truth — for a while."

7. “I have no views as to where it will be, but the one thing I can tell you is it won’t do anything between now and then except look at you. Whereas, you know, Coca-Cola (NYSE:KO) will be making money, and I think Wells Fargo (NYSE:WFC) will be making a lot of money and there will be a lot — and it’s a lot — it’s a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that."

1) Not having a goal.
2) Not having a spending plan.
3) Attempting to derive self-esteem from possessions.
4) Doing what everyone else is doing.
5) Starting to save large and late rather than small and soon.
6) Paying interest to buy things that drop in value.
7) Turning down free money.
8) Buying a new car.
9) Buying more house than you need or can afford.
10) Not protecting your good credit.

Tuesday, September 18, 2012

It’s
the toughest hurdle we face.People just
assume that all investment people and firms are alike.That’s a bit like assuming that all coffee is
alike, or all wine is alike, or all children are alike.The idea makes me laugh.

It’s
simply not true.I lead a local team
that manages nearly $100 million for clients.Actually manages it; follow it daily, analyze the investments, and make
changes as necessary.Every single day,
and we’ve been doing it for almost fifteen years.It’s an awesome responsibility, and we take
it very seriously.

Few
of your acquaintances have this kind of expertise or experience.In fact, few people in this region have this
kind of expertise.You may know others
who sell investments or insurance or mutual funds, but they probably don’t
manage portfolios.Selling is very
different from managing, and it’s very dangerous to confuse the two.

You
may know a lot about investing, but it’s likely a very limited view.Even if you’ve been doing it for a long time,
you’ve only observed one set of circumstances.You know only the investments that you’ve owned since you started.That’s a very small sample size.

Plus,
how would you know that something else didn’t work better?Every decision has an opportunity cost, and
few do-it-yourselfers (even fewer investment salespeople) carefully review all
options.Financial success is always
about choosing pathways to a particular objective, but different paths may be
safer, or faster, or easier.

Seriously,
I get it.You want convenience,
simplicity, and value for your family.And you know that finance and investing is important for accomplishing
your dreams.Here’s the key: ask someone
who really knows the answers.Seek out
genuine expertise and experience.

Tuesday, August 28, 2012

What is an annuity? Annuity payments are different from annuity products. Annuity payments are just an equal stream of payments over a specified period of time. So, if someone agrees to pay you $500 per month for 10 years, that’s an annuity payment.

An annuity product is a formal contract promising a certain payment stream. Simply, for a price, you can buy a specified stream of payments, usually from an insurance company. You trade a lump sum (or, in some cases, multiple payments) for a promised payment stream. The stream could be a specified number of years or it could be your “lifetime.” In fact, it is often your “lifetime” and/or the “lifetime of your spouse.” Sometimes, the amount is decreased to your surviving spouse.

The issuer of an annuity – usually an insurance company or pension plan - faces a lot of uncertainty. An actuary is a trained mathematician in these specialized calculations. He or she looks at your age and gender to estimate how long you (and/or your spouse) will live. Once they estimate the duration of payments, they estimate the investment pool necessary to pay them. Today’s retirement lifespan can last 30-35 years, and that’s a lot of uncertainty.

To protect the issuer, an actuary needs reliable estimates for both longevity and investment earnings. If they pay you too much or too long, then the issuer loses money. For a pension plan, this mistake means that the company sponsor will need to add more money to the plan. For an insurance company, that deficit comes out of reserves or profits. Neither of these options are acceptable, so actuaries tend to be (need to be) conservative in making estimates.

What’s this mean to you or me? Partly, it means that we are likely to do better than those estimates. Estimates are necessarily based on the conservative end of a conservative spectrum of investment returns. That’s how actuaries protect the issuer.

There’s a strong chance we can do better. Why? First, we can use a broader pool of investments for our portfolio. Second, we can adjust the portfolio as conditions change (the actuary has to estimate the future today). Third, there’s no margin built into our model for insurance company profit.

In the end, the residual of these factors – any amounts accumulated over the above the actuary’s estimate – may be passed on to our beneficiaries. Remember, most annuity products are exhausted after the annuitant (or annuitants) dies. There is no surplus to the buyer when an actuary overestimates longevity or underestimates investment returns.

That brings up another really important point. An annuity’s stream of payments is inflexible. Should an emergency – or an opportunity – arise, there is no way to interrupt the payment stream. This lack of flexibility is a huge issue for today’s typical retirement horizon.

Another related point is that inflation wreaks havoc on long-term annuity payments. Think back to your salary in 1987. Would you like to live on that amount today? Could you live on that amount today? Now, leap ahead to 2027; how much will today’s monthly annuity payment buy in tomorrow’s world? Avoid any annuity product that doesn’t include an annual Cost of Living Adjustment (COLA). It will reduce the early payments, but add genuine value down the road.

My last point is also important. Don’t buy an annuity product without comparing prices. Every insurance company uses their own actuaries and estimates. These can vary quite a bit at any point in time. Any buyer, especially those with larger sums to invest, should seek quotations from several highly-rated insurers. Most local insurance agents represent just one company, and I’d always recommend a second opinion before buying.

Dan Danford, CFP® is Principal/CEO of Family Investment Center in St. Joseph, MO. The firm offers commission-free investment services for families, businesses, and nonprofit groups.

Tuesday, August 21, 2012

Recent years seem to have brought more bad investment news
than good, so it’s nice to enjoy some positive markets. Sometimes we have to
remind ourselves that good years are normal and that recent bad years are
abnormal!

Bob Siemens, one of my early mentors, used to remind us that
a market bottom is the “point of maximum pessimism” and that a top is a “point
of maximum optimism.” He also used to say that a rising market “climbs a wall
of worry.”

I share these thoughts because I’m fairly confident we have
passed the point of maximum pessimism, and that 2012’s stock market is
certainly climbing a wall of worry. Both points create some enthusiasm for
investing over the next few years.

What about the
presidential election? What about the Federal Reserve’s artificial low
interest rates? What about the European debt crisis? What about geopolitical
issues in the Middle East or Asia or Africa? Troubling, all, but not
devastating for investors.

The most influential
factor for investors today is noise. Stupid, senseless, loud, relentless,
and insulting market noise. You can’t escape it and it creates a false sense of
urgency about finance and investing. Noise blares from every television,
computer, magazine, newspaper, and billboard. There’s a Crisis Everywhere …
crisis … crisis … crisis. Mostly, it’s absurd.

Stop the madness!
We are going to continue doing what has worked best in the past and we expect
it to put money in our collective pockets. Our process and policies are based
on facts, studies, and proven techniques. We aren’t responding to crises, or
whims, or screeching monkeys on television. We are carefully selecting managers
and/or securities to meet the specific needs of your portfolio and family.

Our promise when we
started in 1998 was simple. We would invest client money using the same
principles, strategies, securities, and safety that we use for ourselves. In
other words, we treat your family in exactly the same way we treat our own.
It’s still true and it’s still our promise.

Our goal in 1998 was
also simple. We wanted to build the premier investment management firm in
this region. Frankly, we welcome your questions and ideas. Anyone on our team
will be pleased to talk with you by telephone, email, or in person. We are
proud to serve your family, and we are happy to explain things or discuss
alternatives. Every discussion makes us better!

Monday, August 13, 2012

With many parts of the world experiencing financial crisis, what has backed the money for all these years?

In the video below, Dan Danford, CFP®, Founder and Chief Executive Officer of Family Investment Center, explains what is backing our currency, the currency of other nations, and why it all doesn't just fall apart when countries face perilous economic issues. Danford also addresses the functions of monetary and fiscal policies, which were created to help in times of a financial crisis.

• Nearly 80% of the private pension plans covered by the Pension Benefit Guaranty Corp., or PBGC, are underfunded, to the tune of $740 billion. The news is even worse among the nation's largest companies. Only 18 defined benefit pension plans offered by companies in Standard & Poor's 500 benchmark are fully funded.

• More than 1,400 companies shut down their pension plans in fiscal year 2011, compared with 1,200 in 2009, according to the PBGC. An additional 152 plans failed, meaning they were terminated without enough money to pay promised benefits and were taken over by the PBGC. The PBGC itself, which is funded by employer-paid insurance premiums, is running a $26 billion deficit.

• Public pension funds are underfunded by at least $1 trillion, according to a report by the State Budget Crisis Task Force. To close the gap, 35 states have reduced pension benefits for their employees, and half have increased worker contributions to their plans, according to a report released in March by the U.S. Government Accountability Office. Three states -- Georgia, Michigan and Utah -- have implemented hybrid plans that include defined contribution plans, similar to 401k's, that shift some investment risk to workers.

• Even fully funded retirement plans aren't exempt. General Motors, once considered the model for running a solid pension plan, shocked its salaried retirees by announcing it was offloading their pensions to Prudential Financial. About 42,000 retirees had to make the difficult decision whether to take a lump-sum settlement or trust Prudential to send them monthly checks.

Most importantly, Weston discusses what pension participants need to know to protect their benefits, some of which include personal savings in addition to the pension, the extent to which many benefits that have already been earned are protected, and the need to closely monitor the plan. Click here to read the entire article.

Tuesday, July 31, 2012

Asset protection is an area of law in which your attorney works with you to ensure that the assets you have worked to accumulate are legally safeguarded from third parties. In the video below, Dan Danford, CFP® and Principal/Chief Executive Officer of Family Investment Center, explains several asset protection strategies.

It is best to implement an asset protection strategy early to avoid the appearance of fraudulent transfer and to ensure you will be protected should the unexpected arise. It is much easier to create an asset protection strategy when the creditors are hypothetical future collectors and not creditors currently knocking on your door.

"How do I purchase bank CDs and make sure they are protected in my trust account? I purchased one already, thinking that because I used trust fund money to buy it, it would be held in the trust. It isn't and I don't want to make the same mistake twice. Also, is there a way that I can move the existing CD into the trust without penalty?"

Monday, July 2, 2012

In CNN’s July 2012 Money Magazine, an article was published called
“101 Ways to Build Wealth.”Here are some
highlights, taken directly from the article, on how investing smarter can help
you save, protect, and build your assets:

·Get
a pro to help with the plans.Participants in 401(k)
plans who receive some form of guidance earn annual returns an average three
percentage points higher than those who don’t, according to Aon Hewitt and
Financial Engines.You may be able to
get financial advice for free; an increasing number of companies offer it as a
benefit.Ask HR.

·Know your number. People who have calculated the total amount
they’ll need to retire have more saved than those who haven’t, the Employee
Benefit Research Institute recently found.Not among the 42% of works who’ve fun this math?It’s easy enough to do: Plug your info into
the “How much will you need for retirement” calculator at www.cnnmoney.com/tools.

·Strategize, don’t improvise. Go a step beyond simply knowing the target –
know how to hit it.A study last year
conducted at the University of California at Irvine found that people who had a
specific plan for their savings amassed between 28% and 85% more than those who
didn’t.“A formal plan makes you a more
disciplined saver,” says Chicago financial planner Cicily Maton.The “What you need to save” tool at www.cnnmoney.com/tools can help you determine how much
to put away.

·Be passively aggressive when investing.Few actively managed funds consistently beat their
benchmarks.That means for a diversified
portfolio, you’d have to pick right a bunch of times.Good luck with that.Instead, put the bulk of your money in index
funds and ETFs from the MONEY 70 that cover the market, then invest the rest in
managers you think have the goods.

·Merge and purge.Some 50% of Americans have at least one retirement plan from an
old employer hanging around, according to a survey by ING Direct.Got a few yourself?Roll your accounts over into a single IRA, or
even into your current employer’s 401(k).That way you’ll be able to track progress more easily, see which funds are
failing you, assess your mix, rebalance the whole package, and cut your
fees.Since you can set up an IRA with a
bank, brokerage, or fund company, you’ll also have access to more investment
choices than you had in that old 401(k).

·Take tips with a (large) grain of
salt.“Following the latest stock tip is a sure way
to avoid the steady gains a diversified portfolio offers.A tip from an acquaintance is just
interesting conversation.” – David Thompson, League City, Texas

·Don’t be so quick to erase the
mortgage. While paying off your credit card ASAP is
Personal Finance 101, it’s not always better to pay off your home loan faster
than needed.“Between low rates and
deductibility, there are better things to do with your ‘extra’ money,” says T.
Rowe Price planner Stuart Ritter.If you
put an added $100 a month toward a $100,000, 30-year mortgage at 5%, you’d pay
the loan off in 21 years.But invest
that $100 a month for 21 years with an annual return of 7%, and you’d have
$57,000 – enough to pay off the remaining $45,000 loan balance, with a lot left
over.

·Keep your emotions in check.A recent report from Barclays Wealth identified four of the most
common mistakes people make: 1) focusing on single investments rather than the
big picture – consequence: not being appropriately diversified, 2)
concentrating on a short-term time horizon – consequence: mistiming the market,
3) taking more risks when comfortable and less risks when not – consequence:
buying high, selling low, and 4) taking action in hopes of gaining control –
consequence: high fees from trading too frequently.

·Don’t flee with the crowd.Minimum allocation to stocks if you are at least 15 years away
from retirement: 50%.In the past year
nervous investors have pulled $170 billion out of stock funds, while pouring
money into bonds.But over all the
20-year rolling periods since 1926, a 50/50 stock-bond portfolio – what
conservative target-date funds suggest for near-retirees – delivered annualized
returns of 8.7%, vs. 5.5% for a 100% long-term government bond portfolio.

·Be like Buffett. “I follow Warren Buffett’s advice: Be fearful
when others are greedy, and greedy when others are fearful.It’s a reminder that down days are good
buying opportunities and nothing goes up forever.” – Brian Frain, Milwaukee

·Men: invest more like a lady.Many studies during the past dozen or so years have suggested that women
investors have better results than men, largely because their lack of
confidence about their financial prowess stops them from making foolish
mistakes.The consensus: Women’s
portfolios generally beat men’s by about one percentage point a year on a
risk-adjusted basis.Big deal, you
say?Well, yes.On an account with $250,000 in assets and
contributions of $10,000 a year, that extra point would translate to about
$215,000 in additional profits over 20 years, if you average 7% a year on the
portfolio rather than 6%.

Monday, June 25, 2012

The current economic climate is a great time for borrowers but a lousy time for savers. Because of the recession, the Federal Reserve has lowered interest rates to the lowest rate in roughly 50 years. While this was done to stimulate borrowing, which is beneficial for the economy, low interest rates mean low risks and thus low returns for savers looking at investment vehicles.

In this video, Dan Danford, Founder and Chief Executive Officer of Family Investment Center, shares basic economic principles and helpful financial tips on different investment types.

The Impact Award really grew from two thoughts. First, people think our business is mainly about money, but it's really about impact. We help people do things that will bring positive impact to their retirement, their family, and the charities they love.

Second, St. Joseph doesn't do a real good job of recognizing achievement. I mean, there are some nice awards out there for some very worthy people. But there is a lot of good that goes unnoticed, and I really think that's too bad. It is genuinely remarkable what our citizens do, and outsiders sometimes see things that we overlook.

That is certainly the case with Eileen. The University of Missouri Sinclair School of Nursing recognized her, and that makes me proud. In fact, it should make everyone in St. Joseph proud. Eileen Dyer brought true impact to nursing and that school, and all of us know her for the positive impact she brings to everything she does. This is just our way of recognizing that impact.

Friday, June 15, 2012

Life is expensive no matter what your personal circumstances may be. But by planning properly and making wise choices with your money, you may avoid financial turmoil. A fun article was recently written which bluntly suggests several reasons that people become broke:

Tuesday, June 12, 2012

When should you start thinking about purchasing a long-term care coverage policy?

In the video below, Dan Danford, Founder and Chief Executive Officer of Family Investment Center, gives an outlines the four things everyone should consider when deciding to purchase long-term care coverage.

Monday, June 4, 2012

Dennis Atkins has been a good friend of mine for almost 40 years. He has a disability, but you'll quickly see that it hasn't limited him much at all. He recently retired from his long-time career at American Family Insurance, and now offers his inspirational message through various running clinics and public speaking. Dennis lives in St. Louis, but maintains many friend and family ties to northwest Missouri. Dennis shared his story with our blog readers:

This is a story of losing my vision but seeing things clearer than I ever have. In July 1979, I was diagnosed with an eye disease called Retinitis Pigmentosa. Most refer to this condition as RP. RP started out with me not being able to see the stars at age 14. The disease continued to progress with night blindness at age 18. I remember talking with my parents and grandparents about not seeing at night well. The advice was that some people have night blindness and not to worry.

I continued to play sports and graduated from Missouri Western not giving my failing vision any thought. At age 23, I was missing the softball in the lights while playing. I was placed on the bench. My thought was now I need to go see about getting glasses. The eye doctor told me that I had RP. At this time, I had lost a lot of my peripheral vision. This was a very difficult time for me because the doctor felt that I would be totally blind in 24 months.

At first I wanted to give up but this changed to where I wanted to prove this wrong. See, I was no different than anyone else that had received heart-breaking news. My thoughts were, Where do I go now? What do I do? What will be my future? I was determined to find the answers to these questions. I want to share my story, so you too will never give up.

Here it is 33 years later. My vision is down to seeing shadows, light and dark and fading. The real blessing is that I am a long distance runner and run by myself every day. The good Lord, after being outside for awhile, allows me to see the black expansion joint in the middle of the street. The expansion joint guides me for hours as I run through my subdivision.

I was fortunate in that there was a slow progression of my eye disease. I had the time to prepare, by memorizing what things look like, developing a sense of direction, continuing my education and time to make the necessary adjustments in how to continue doing everything that I wanted. I learned to use my other senses to their full potential. Are you prepared for tomorrow?

The ability to have physical sight is wonderful and should not be taken for granted. I would like to share with you how I see with my mind, heart, and spirit. My wish is that you can develop these abilities in addition to your physical gift of vision. Can you see the benefit? Let me explain how I use these to help me see today.

Here is how your mind can work for you. Just try this. It works. Home repairs can be fun if you try. Most home projects include your spouse, family member, or friends. Just use their eyes at times if needed. I just picture completing the task in my mind. I think about how I can do this and do not stop thinking about it until I have figured out a way.

For example, I wanted to repair a small hole in the sheet rock wall and repaint this wall. I feel the size of the hole over and over with my fingers. I then decided that the hole is too large just to fill but would need to be taped as well. I pictured over and over in my mind the steps needed to accomplish this. The repairs are made successfully and then it was on to painting. Could you use this same process every day maybe at work when completing a project or facing a challenging goal? The answer is yes. Taking the time to picture the steps, methods, and the finish line is critical to your success.

Seeing with your heart allows you to feel things you never would through physical vision. I do not have the ability to see what someone looks like, facial expressions, their dress, or even if they are experiencing a bad hair day. I have a huge advantage over you. I listen with my ears, what they say and how they say it. My heart can see them as they truly are. I listen to their excitement, sadness, and gain insight into their character. My goal is to learn who they really are and their potential.

What a blessing! You too can learn this. Using your physical vision alone can many times lead to misperceptions and wrong assumptions. Using your heart helps you get to know a person better. What joy there is in making a new friend or hiring a person outside your comfort zone. Most individuals are afraid of using their heart. There is nothing wrong with having a soft, caring, loving, and insightful heart. Developing this type of vision takes courage, determination, and effort to see a person’s real potential.

Seeing with my spirit has been the largest benefit for me. My faith is what has carried me every day since July 1979. Fear and being afraid of failing stops most of us from living our dreams and I was no different. My spirit feeds my mind and heart. I have to know in my spirit that I am not in this alone. Every day I go out to run or go off to work there is fear. What if I get lost while running? What if I am asked to do something at work that I have never done? God feeds my spirit to stop and think it through with my mind and heart. Suddenly I feel a sense of calm. My fear slowly goes away.

When I first started running in my subdivision I would get lost. I would panic and walk around for several minutes to an hour. God was there with me. Once I stopped being terrified, He gave me a way to know where I was. I walked over to a mailbox. I found raised numbers and letters. My mind went to work. I just needed to memorize the street names and range of numbers for my blocks. What a gift! I now use my spirit through prayer to feed my mind and heart.

Now my vision is fading. Seeing shadows, light, and dark is what I see. My only vision comes through my spirit, heart, and mind. I am so glad that I have been given the ability to see like I never have before. My wish is that you learn these gifts in addition to having your physical gift of sight.

Do you have fading shadows in your life? Why not just use the gifts that you have been given to never give up? Let's live our dreams together and make a difference with our lives. Fading shadows are what I have left, but beautiful sight has been restored through my spirit, heart, and mind. What great joy!

About Me

Dan Danford is founder and CEO of Family Investment Center in St. Joseph, Missouri. The firm is a commission-free investment advisor registered with the SEC. Danford and other advisors at the firm specialize in managing large portfolios of traditional investments. They do, however, advise investors on a broad range of wealth management services. More about Danford and this unique firm can be found at www.familyinvestmentcenter.com or call (816) 233-4100.